A new practice that I’ve run into lately is that of “researching” your potential buyer or seller – buyers do it to gain an “edge” into the insight of who the sellers are and how they might win in a multiple offer situation; sellers do it so that they can determine the best “fit” for their home and neighborhood. I’ve heard some pretty strange stories that that I don’t feel quite comfortable sharing but I’ve also heard folks who found out some pretty great things. The bottom line is “behave” and if you find yourself with a moment of poor judgement – don’t post it! Below is an article from Inman News written by my friend, Carl Medford.
How far are sellers going to investigate potential buyers?
Confronted with similar multiple offers, sellers want more than just an awesome price and great terms
- Emulating practices prospective employers have utilized for years, some sellers are now performing extensive online searches for buyers submitting offers for their property.
Buyers should be aware.
When sellers get multiple offers on their home, my practice is to email every offer to the seller as it comes in, and then I prepare a multiple offer spreadsheet so that they can compare offers side-by-side. I recently met with sellers to go over multiple offers and came to a new realization: sellers are doing their homework on a whole other level.
As we met to discuss the spreadsheet and choose a winner, it became apparent that they were not only deliberating the offers, but they were also discussing each prospective buyer as well. In great detail, in fact. Puzzled, I asked how they know so much about each buyer.
“That’s easy,” they said. “We checked out each one online as the offers came in.”
With an extreme shortage of inventory plaguing many housing markets, some sellers are looking to the internet to increase their control over exactly who will purchase their home.
Confronted with similar multiple offers, sellers want more than just an awesome price and great terms.
“If more than one of these offers meets our goals,” they reason, “Then we are going to select the winning buyer based not on the terms, but on who we want living in our property after we leave.”
More information, better choice
The practice of vetting buyers is certainly not new. Sellers frequently voice their preferences for the type of buyers they want to purchase their home.
Many sellers, for example, especially ones who have lovingly upgraded their property over the years, are averse to the idea that an investor might buy their beloved dwelling and turn it into an income property.
While most sellers understand that the Fair Housing Act prohibits them from discrimination based on race, color, religion, sex, familial status or national origin, there is plenty of other criteria to use when evaluating potential buyers.
When representing buyers, we typically encourage them to write a letter to the sellers explaining who they are and why they love any specific home.
The goal has always been to influence the sellers to choose them out of a stack of multiple offers. Sellers, however, desiring to have more control in the selection process, are looking for more information.
Consequently, they are going online. After my first encounter with sellers vetting prospective buyers online, I began hearing of similar practices from others. Although many buyer wannabes submit biographical letters with their offers, the level of information desired by the many sellers is on the rise.
Emulating practices prospective employers have utilized for years, some sellers are now performing extensive online searches for buyers submitting offers for their property.
They are digging into Google, Facebook, LinkedIn, Free Public Records Directories, Pipl and any other site they can find that may have information. Some are also checking sex offender and criminal records sites.
Information is not hard to find. As an example, Lifehacker.com has a post by Adam Dachis entitled “How to Use the Internet to Investigate Your Next Date, Coworker, or New Friend (Without Being Creepy).” Some sellers are even upping the ante by paying for information on sites like Truthfinder.com.
Disturbing? Get over it. It’s the new reality. This genie is out of the bottle and will not be returning any time soon.
It is a modern twist on caveat emptor, “buyer beware.” It has become a two-way street: in addition to buyers carefully examining a home they wish to purchase, sellers are now thoroughly investigating them.
What can buyers do?
Savvy buyers should do some pre-emptive work of their own by searching for themselves online to ensure there is nothing that might give sellers a negative impression.
Love hosting noisy parties at all hours? Your online pictures of beer bashes might resonate with your friends but could spell doom for that offer on a nice house in a quiet cul-de-sac.
My sellers ultimately chose the second highest offer.
“We don’t want you to do a multiple counter offer,” they explained. Pointing to the offer they had selected, they said, “We are OK with this price, and based on all the research we’ve done, this buyer most closely resonates with our values. Contact his agent, and have him tell his buyer, ‘Welcome home.’”
Carl Medford is the CEO of The Medford Team.